Are You Selling Tangible Asset Or Software Applications?

Despite the name of the blog "Just My Opinion" I have been reluctant to bring my subjective views to any of my blog posts. But with wave after wave of newbies coming into the REO/BG/CMO/etc, industries with absolutely zero background or experience I believe this is an opportunity for those of us that have had success in this and other transaction based industries to set ourselves apart. I recently had a record setting week where I signed 34 NCND's and yet was not able to verify a single REO package as available for sale. Part of my job as a mandate is to insulate my clients from this futile exercise, by allowing them to focus on closeable transactions. So here are some of my thoughts, remember they are "Just My Opinion"

First, let's stop selling "Excel Spreadsheets", tapes, ports or whatever else you want to call them. Real investors are buying and selling the actual asset. That means due diligence is crucial. I have been offered product by many "private sellers that just took it down", only to find that they did not perform any due diligence, or transfer title of the asset into their own name. In many cases, sellers cannot even provide access to the asset for someone to perform due diligence, such as BPO's This is my first indicator that the product is an assignment or under contract, but has not been purchased. Most buyers will accept this type of transaction, but want to deal with the owner of the product. Conversely, there are many buyers that claim to have the ability to close a deal, but cannot provide proof of past acquisitions or suitable proof of funds.

Second, let's use appropriate and universal terminology. In my company an "owner" is the entity that holds verifiable title to the asset. a "seller" is someone authorized, in writing, to sell the asset, but may or may not be the owner. A mandate/rep is someone authorized by the seller, in writing, and in some cases with signatory authority, to market the asset or present the buyer, and assist with vetting and due diligence. The only other parties are either "intermediaries" or "referral sources". We do not recognize a position many refer to as "next to the rep/mandate". Too many viable transactions fail to close because the parties misrepresent or misunderstand their role in the transaction.

Third, Do Deals!. "sanitized" tapes, one-sided proofing/vetting, zero earnest money deposits, are all smoke screens that prevent deals from closing. Somehow, we've transformed our industry into one in which days and weeks are being spent confirming that the other side is "real". Escrow/Title companies are the best resource for this process and they have a fiduciary responsibility for confidentiality. Consider using 3rd party proofing services such as these, your clients will consider it to be money well spent.

Here's the example that I share with new clients.

• When I've sold a piece of real estate, I not only gave the buyer my address, I gave him access to my home. I allowed him to physically view the property and 'kick the tires'. This is my way of proving that I am a legitimate owner/seller. In today's market many homeowners are even letting potential buyers "sleep on it" by allowing them an opportunity to spend the night in the property before buying. In return, that buyer, when interested in buying, put up earnest money and immediately begins due diligence (appraisal, inspection, title search, etc) and proves his financial ability to complete the transaction. This was his way of proving that he is a legitimate buyer/investor. The same applies when I've sold automobiles or any other asset. Even car dealerships let you SEE and DRIVE the car before you even have to prove your ability to purchase.
  

• Here is what I was told by the Asset Manager of a well known regional bank...
  "Robin, we're not worried about someone having the addresses. How else would they know what they're buying? Since we are the owner, it doesn't matter who buys it or how they found out about it, we will get paid when it sells. Anyone that is not willing to give you addresses or other relevant information is probably not the owner and is concerned that they won't get paid if it sells". I'm sure we've all found this to be true.
  

Finally, let's all agree to run integrity based businesses. In my experience, buyers and sellers cannot make "informed" decisions to buy or sell without "information". Our job, whether as mandates/rep, intermediaries or referral sources is to obtain and provide this information. The accuracy and timely delivery of this information is paramount in successfully closing any transaction.